Jack Dorsey’s TBD Presents Whitepaper For Decentralized Bitcoin Exchange
20 Novembre 2021 - 7:28AM
NEWSBTC
The first product of the Bitcoin-focused TBD will be tbDEX. A
decentralized exchange that they deem “A Liquidity Protocol” in the
recently released whitepaper. The Bitcoin network is
permissionless, anyone with an Internet connection can jump in at
any time. However, the Fiat world we live in is not. The banking
system has endless requirements for participation, and those leave
a high percentage of the population bankless and vulnerable. “We
believe that the economy should be inclusive. We need to build
on-ramps to this future where everyone can access and participate
in the economy,” says TBD in the post that announces tbDEX. Related
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subsidiary of Jack Dorsey’s Square, they created TBD “with the sole
goal of making it easy to create non-custodial, permissionless, and
decentralized financial services” for Bitcoin. And now, they have a
plan. What Is TBD ‘s Value Proposition? The tbDEX aims “to
build bridges between the fiat and cryptocurrency worlds,” that
much is clear. We still live in a Fiat world and, if Bitcoin is
going to succeed, we need new, simpler, and cheaper ways to
interact with said world. “There are serious challenges to
realizing this vision. Fiat rails are regulated, and no interface
with either the traditional monetary system or “real world” can be
completely trustless.” So, what solution does TBD proposes?
The tbDEX will allow participants to interact and transact with
each other like Bisq and similar projects. However, TBD will also
let users “mutually and voluntarily rely on trusted third-parties
to vouch for the counterparty.” In the whitepaper itself, they
contemplate that vv will be part of the network. “PFIs can
be, but are not limited to, fintech companies, regional banks,
large institutional banks, or other financial institutions; PFIs
have access to fiat payment systems and the ability to facilitate
fiat payments in exchange for tokenized cryptocurrency assets or
vice versa. In theory, a PFI could accept or produce cash or checks
as a mechanism for effectuating fiat settlement.” The tbDEX will
provide financial institutions with tools for KYC and AML
procedures: “The protocol will also carry the required
regulatory-clearing information required by PFIs to conduct their
AML and KYC checks before they provision liquidity to the wallet
owner. However, the necessary information may vary based on the
jurisdiction.” Wait a minute… a decentralized exchange that
requires KYC? What would be the point of that? Well, the protocol
doesn’t require KYC procedures, but some institutions might. The
good news is, participants don’t have to deal with those
institutions if they don’t want to. They can just interact with
each other and establish trust in other ways. BTC price chart
on Bitbay | Source: BTC/USD on TradingView.com The Cost Of
Anonymity This is where it gets interesting. According to the
whitepaper: “The tbDEX protocol facilitates decentralized networks
of exchange between assets by providing a framework for
establishing social trust, utilizing decentralized identity (DID)
and verifiable credentials (VCs) to establish the provenance of
identity in the real world.” It’s important to notice that “the
protocol itself neither collects nor records any personally
identifiable information.” However, if a participant wants
anonymity it’s his or her responsibility to optimize for it. Once
again, the whitepaper: “Our goal is not to maintain anonymity
of transactions at all costs. Nor is it to undermine an
individual’s ability to optimize for anonymity. Nothing in
principle precludes anonymous transactions for financial privacy on
the tbDEX network. A PFI could, in principle, require no VCs, but
such transactions would represent a high degree of risk to the
counterparties.” To assume that risk costs money. It’s as
simple as that. The announcement post puts it nicely. “Transaction
costs are ultimately driven by risk. At maximum anonymity,
transaction costs will necessarily be higher; at maximum
disclosure, they should be lower. This approach to price discovery
allows the marketplace to find the right balance.”
Related Reading | Is Hyperinflation Inevitable? Jack Dorsey Says
It’ll “Change Everything” If You Have A Suggestion, Send It To TBD
The whitepaper is a rough outline of that tbDEX will eventually be.
“This initial draft of the whitepaper is meant to establish a
conceptual understanding of the high-level design of the proposed
tbDEX protocol. It should not be considered complete or final. It
represents a proposed design for public comment.” If you have any
suggestions, contact TBD via Twitter or send them a pull request on
GitHub. Featured Image: tbDEX diagram from the whitepaper | Charts
by TradingView
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